Startups that work like GrubHub for prescriptions say CVS' move into drug delivery is missing something big
- On Tuesday, CVS Health announced that it will offer deliveries of prescription medications from nearly 10,000 of its retail stores.
- To do so, CVS will contract with the US Postal Service and deliver medications the same day a customer orders them or within two days.
- The move follows the lead of several existing drug-delivery startups, but leaders of two of those companies say CVS' new plan lacks key insight about consumers.
Talha Sattar, the founder of Nimble Pharmacy, doubts that CVS' new prescription delivery service will lead to anyone's "mind being blown."
That's his favorite turn of phrase for the feature he says characterizes his own drug-courier startup. Nimble customers get their medications hand-delivered to their door for roughly the same cost as drug-delivery services that work with health insurers like OptumRx - only with less hassle, more personalization, and a mobile app.
On Tuesday, CVS Health announced a plan to offer deliveries of prescription medications from nearly 10,000 of its retail stores. Customers could get their drugs delivered to their home either on the same day they ordered it or within two days. It's a strategic move for CVS, since a handful of insurance-backed mail order programs have existed for years, and courier services like Nimble have recently been trying to improve the experience.
But Sattar, Nimble's CEO, says CVS' plan is missing a key element: the human one.
Nimble is highly personalized. Because the company works exclusively and directly with independent physicians, your doctor usually knows your Nimble pharmacist.
"Ours is a very personal product," Sattar told Business Insider.
Plus, as a courier delivery service, Nimble can't leave packages at the door if no one's home, so customers always make eye contact with the person who drops off their medications.
As part of CVS' new initiative, the US Postal Service will handle deliveries and is cleared to leave packages at the door if no one is home.
Nimble has another potential advantage over CVS: it was built to be an online, mobile-friendly business, which is increasingly the way consumers are accustomed to getting goods and services. In addition to a smartphone app, Nimble has an iPad app designed for patients to use at their doctor's office to get basic, one-time antibiotics immediately for $3.99.
Doctors who work with Nimble get the iPads set up in their waiting rooms, and Nimble pays for and supplies the office with enough antibiotics to serve their patients' needs. The patient sees the doctor, gets the prescription, and then can order the medication on the iPad through Nimble. They walk out with the medication in hand.
This is the experience that Sattar believes blows his customers' minds.
"They use it once and it's like the first time you ordered an Uber," Sattar said. "Their minds are blown that it was such a good experience. They're like, 'What just happened?'"
Sattar says that while the company doesn't make money on these one-time antibiotics (since they're largely covering the cost and not going through insurers), they do make money when satisfied customers then transfer their chronic medications over to Nimble.
Sattar thinks Nimble can use this approach to eventually offer its services nationwide. For now, Nimble is available in roughly half a dozen US cities including Seattle, San Diego, San Francisco, Phoenix, Dallas, and Detroit.
Nimble is not the only courier delivery service that maintains they don't feel threatened by CVS. Eric Kinariwala is the CEO and founder of Capsule Pharmacy, a similar prescription-delivery service operating in New York City. In a statement to Business Insider, he said CVS is missing "the core insight that better technology and a brand that consumers love are required" to run a successful medication delivery company.
"At Capsule, technology enables real-time, private conversations with a pharmacist and a seamless delivery process. We can also ensure the best price for patients on medication through our partnerships with doctors, insurance companies, and manufacturers," Kinariwala said.
Like Nimble, Capsule is online and mobile friendly. It also has a guaranteed delivery window of just two hours.
"We're excited by [CVS'] announcement," Kinariwala said, "because we believe this decision reflects consumer demand for delivery and creates a market for our category."
Lydia Ramsey contributed reporting.
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